EX-99.2 3 g01232k2exv99w2.htm EX-99.2 EX-99.2
 

Exhibit 99.2
MEDCATH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                 
    Three Months Ended March 31,     Six Months Ended March 31,  
    2006     2005     2006     2005  
Net revenue
   $ 208,532     $ 192,014     $ 393,653     $ 376,774  
Operating expenses:
                                
Personnel expense
     73,195       59,402       133,670       116,615  
Medical supplies expense
     58,484       55,564       110,443       108,050  
Bad debt expense
     17,826       11,947       32,264       23,431  
Other operating expenses
     41,480       37,505       82,533       75,905  
Depreciation
     9,669       9,431       19,310       19,167  
Amortization
     252       290       504       580  
(Gain) loss on disposal of property, equipment and other assets
     (37 )     71       82       74  
 
                        
Total operating expenses
     200,869       174,210       378,806       343,822  
 
                        
Income from operations
     7,663       17,804       14,847       32,952  
Other income (expenses):
                                
Interest expense
     (8,908 )     (7,775 )     (17,976 )     (15,773 )
Interest and other income, net
     1,388       621       2,805       1,016  
Equity in net earnings of unconsolidated affiliates
     1,410       886       2,475       1,655  
 
                        
Total other expenses, net
     (6,110 )     (6,268 )     (12,696 )     (13,102 )
 
                        
Income from continuing operations before minority interest, income taxes and discontinued operations
     1,553       11,536       2,151       19,850  
Minority interest share of earnings of consolidated subsidiaries
     (4,790 )     (4,402 )     (7,608 )     (8,401 )
 
                        
Income (loss) from continuing operations before income taxes and discontinued operations
     (3,237 )     7,134       (5,457 )     11,449  
Income tax expense (benefit)
     (1,297 )     2,856       (2,184 )     4,579  
 
                        
Income (loss) from continuing operations
     (1,940 )     4,278       (3,273 )     6,870  
Income (loss) from discontinued operations, net of taxes
     —       (475 )     —       1,473  
 
                        
Net income (loss)
   $ (1,940 )   $ 3,803     $ (3,273 )   $ 8,343  
 
                        
Earnings (loss) per share, basic
                                
Continuing operations
   $ (0.10 )   $ 0.24     $ (0.18 )   $ 0.38  
Discontinued operations
     —       (0.03 )     —       0.08  
 
                        
Earnings (loss) per share, basic
   $ (0.10 )   $ 0.21     $ (0.18 )   $ 0.46  
 
                        
Earnings (loss) per share, diluted
                                
Continuing operations
   $ (0.10 )   $ 0.22     $ (0.18 )   $ 0.36  
Discontinued operations
     —       (0.02 )     —       0.07  
 
                        
Earnings (loss) per share, diluted
   $ (0.10 )   $ 0.20     $ (0.18 )   $ 0.43  
 
                        
Weighted average number of shares, basic
     18,618       18,177       18,559       18,110  
Dilutive effect of stock options
     —       1,285       —       1,139  
 
                        
 
Weighted average number of shares, diluted
     18,618       19,462       18,559       19,249  
 
                        

 

 

MEDCATH CORPORATION
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
                                                 
    Three Months Ended March 31,     Six Months Ended March 31,  
    2006     2005     % Change     2006     2005     % Change  
Statement of Operations Data:
                                                
Net revenue
   $ 208,532     $ 192,014       8.6 %   $ 393,653     $ 376,774       4.5 %
Adjusted EBITDA (1)
   $ 27,753     $ 27,596       0.6 %   $ 45,366     $ 52,773       (14.0 )%
Income from operations
   $ 7,663     $ 17,804       (57.0 )%   $ 14,847     $ 32,952       (54.9 )%
Income (loss) from continuing operations
   $ (1,940 )   $ 4,278       (145.3 )%   $ (3,273 )   $ 6,870       (147.6 )%
Earnings (loss) per share from continuing operations, basic
   $ (0.10 )   $ 0.24       (141.7 )%   $ (0.18 )   $ 0.38       (147.4 )%
Earnings (loss) per share from continuing operations, diluted
   $ (0.10 )   $ 0.22       (145.4 )%   $ (0.18 )   $ 0.36       (150.0 )%
 
                                                
(1) See Supplemental Financial Disclosure—Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures.
                                                
 
                                                
    Three Months Ended March 31,     Six Months Ended March 31,  
    2006     2005     % Change     2006     2005     % Change  
Selected Operating Data (consolidated) (a):
                                                
Number of hospitals
     11       11               11       11          
Licensed beds (b)
     672       672               672       672          
Staffed and available beds (c)
     660       631               660       631          
Admissions (d)
     12,566       11,719       7.2 %     23,851       22,602       5.5 %
Adjusted admissions (e)
     16,340       15,617       4.6 %     31,121       29,893       4.1 %
Patient days (f)
     42,361       42,503       (0.3 )%     80,339       79,661       0.9 %
Adjusted patient days (g)
     55,203       56,521       (2.3 )%     104,776       104,878       (0.1 )%
Average length of stay (days) (h)
     3.37       3.63       (7.2 )%     3.37       3.52       (4.3 )%
Occupancy (i)
     71.3 %     74.8 %             66.9 %     69.4 %        
Inpatient catheterization procedures
     6,517       5,891       10.6 %     12,209       11,699       4.4 %
Inpatient surgical procedures
     3,516       3,151       11.6 %     6,539       5,926       10.3 %
(a)   Selected operating data includes consolidated hospitals as of the end of the period reported in continuing operations but does not include hospitals which are accounted for using the equity method or as discontinued operations in our consolidated financial statements.
 
(b)   Licensed beds represent the number of beds for which the appropriate state agency licenses a facility regardless of whether the beds are actually available for patient use.
 
(c)   Staffed and available beds represent the number of beds that are readily available for patient use at the end of the period.
 
(d)   Admissions represent the number of patients admitted for inpatient treatment.
 
(e)   Adjusted admissions is a general measure of combined inpatient and outpatient volume. We computed adjusted admissions by dividing gross patient revenue by gross inpatient revenue and then multiplying the quotient by admissions.
 
(f)   Patient days represent the total number of days of care provided to inpatients.
 
(g)   Adjusted patient days is a general measure of combined inpatient and outpatient days. We computed adjusted patient days by dividing gross patient revenue by gross inpatient revenue and then multiplying the quotient by patient days.
 
(h)   Average length of stay (days) represents the average number of days inpatients stay in our hospitals.
 
(i)   We computed occupancy by dividing patient days by the number of days in the period and then dividing the quotient by the number of staffed and available beds.

 

 

MEDCATH CORPORATION
SUPPLEMENTAL FINANCIAL DISCLOSURE — RECONCILIATION OF GAAP FINANCIAL MEASURES
TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
     The following table reconciles Adjusted EBITDA with MedCath’s income (loss) from continuing operations as derived directly from MedCath’s consolidated financial statements for the three and six months ended March 31, 2006 and 2005.
                                 
    Three Months Ended March 31,     Six Months Ended March 31,  
    2006     2005     2006     2005  
            (in thousands)          
Income (loss) from continuing operations
   $ (1,940 )   $ 4,278     $ (3,273 )   $ 6,870  
Add:
                                
Income tax expense (benefit)
     (1,297 )     2,856       (2,184 )     4,579  
Minority interest share of earnings of consolidated subsidiaries
     4,790       4,402       7,608       8,401  
Equity in net earnings of unconsolidated affiliates
     (1,410 )     (886 )     (2,475 )     (1,655 )
Interest and other income, net
     (1,388 )     (621 )     (2,805 )     (1,016 )
Interest expense
     8,908       7,775       17,976       15,773  
(Gain) loss on disposal of property, equipment and other assets
     (37 )     71       82       74  
Amortization
     252       290       504       580  
Depreciation
     9,669       9,431       19,310       19,167  
Share-based compensation expense
     10,206       —       10,623       —  
 
                        
Adjusted EBITDA
   $ 27,753     $ 27,596     $ 45,366     $ 52,773